I.T.O., 2(2), Gwalior V. Shri Matadeen Garg, Morena

ITA 452/AGR/2010

• Counselvise Citation: 45220314 RSA 2010
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-02-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 03-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Keywords: Unexplained cash credit
• Section: 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.432/AGR/2010 ASSESSMENT YEAR: 2001-02 SHRI MATADEEN GARG, VS. INCOME TAX OFFICER, 2(2) , PROP. M/S. BANWARILAL SATISH KUMAR, GWALIOR. SABALGARH, DISTT. MORENA (PAN: ACOPG 5502 B). ITA NO.452/AGR/2010 ASSESSMENT YEAR: 2001-02 INCOME TAX OFFICER, 2(2), VS. SHRI MATADEEN GARG, GWALIOR. PROP. M/S. BANWARILAL SATISH KUMAR, SABALGARH, DISTT. MORENA (PAN: ACOPG 5502 B). (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI RAJENDRA SHARMA, ADVOCATE REVENUE BY : SHRI A.K. SHARMA, JR. D.R. DATE OF HEARING : 14.02.2012 DATE OF PRONOUNCEMENT : 24.02.2012 ORDER PER A.L. GEHLOT, A.M.: THESE ARE CROSS APPEALS FILED BY THE ASSESSEE AND R EVENUE AGAINST THE IMPUGNED ORDER DATED 08.09.2010 PASSED BY THE CIT(A ), GWALIOR. ITA NOS.432 & 452/AGR/2010 A.Y. 2001-02 2 2. THE EFFECTIVE GROUND RAISED IN THESE CROSS APPEA LS IS IN RESPECT OF ADDITION OF ` 18,29,313/- MADE UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN BUSINESS OF WHOLESALE TRADING OF MUSTARD SEEDS, GRAINS, CHANA, URAD ETC. IT IS SECOND ROUND OF LITIGATION AS IN FIRST ROUND OF LITIGATION THE I.T. A.T. VIDE ORDER DATED 03.04.2007 SENT BACK THE MATTER TO THE FILE OF THE ASSESSING O FFICER TO EXAMINE THE UNEXPLAINED CASH CREDIT OF ` 18,33,932/- AND INTEREST THEREON AT ` 59,197/- AFRESH. IT HAS BEEN NOTICED FROM THE ORDER OF THE CIT(A) THAT THE I.T.A .T. WHILE SENDING BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER GAVE CE RTAIN DIRECTIONS. THE ASSESSING OFFICER HAS ALSO GIVEN LIBERTY TO RECORD THE STATEM ENTS OF MANDI AUTHORITIES. IN COMPLIANCE TO THE DIRECTION OF THE I.T.A.T., THE AS SESSING OFFICER, OUT OF THE ADDITION OF ` 18,33,932/- ACCEPTED ` 4,619/- ON THE GROUND THAT THE ASSESSEE HAS PROVED THE GENUINENESS OF THE LIABILITY. THE BALAN CE AMOUNT OF ADDITION OF ` 18,29,313/- PLUS INTEREST OF ` 59,197/- WAS SUSTAINED ON THE GROUND THAT THE ASSES SEE HAS FAILED TO PROVE THE CREDITORS AS SUMMONS UNDER SECTION 131 ISSUED TO THE CREDITORS WERE RETURNED UNSERVED EXCEPT IN SIX CRED ITORS. THE ADDITION MADE BY THE A.O. HAS BEEN PARTLY SUSTAINED TO THE EXTENT OF ` 6,17,149/- BY THE CIT(A) AND RELIEF OF ` 12,12,164/- WAS ALLOWED. THE CIT(A) DIRECTED THE A SSESSING OFFICER TO ITA NOS.432 & 452/AGR/2010 A.Y. 2001-02 3 RECOMPUTE THE INTEREST PAID TO THE FARMERS ACCORDIN GLY. THE REVENUE AND THE ASSESSEE BOTH ARE IN APPEAL AGAINST THE ORDER OF TH E CIT(A) IN THESE CROSS APPEALS. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES. THE ADMITTED FACTS OF THE CASE ARE THAT ` 12,12,164/- WAS PERTAINING TO THE EARLIER YEAR AND SUCH EARLIER YEAR BALANCE CANNOT BE ADDED UNDER SECTION 68 OF TH E ACT. IN THE ALIGHT OF THESE ADMITTED FACTS AND POSITION OF LAW, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN DELETING ADDITION OF ` 12,12,164/-. 5. AS REGARDS ADDITION OF ` 6,17,149/- SUSTAINED BY THE CIT(A), WE NOTICED THAT THE ASSESSEE HAS DISCHARGED HIS ONUS UNDER SECTION 68 OF THE INCOME TAX ACT BY SUBMITTING THAT THESE WERE THE TRADE CREDITORS AND COMPLETE NAMES AND ADDRESSES OF THE CREDITORS WERE GIVEN TO THE ASSESSING OFFICER. THE ASSESSEE HAS CO-OPERATED WITH THE DEPARTMENT AND TRIED TO PRODUCE THE TRADE CREDITORS BEFORE THE ASSESSING OFFICER AND FOR THIS PURPOSE THE ASSESSEE REQUESTED VIDE HIS LETTER DATED 28.11.2008 THAT DUE TO ELECTION ON 27.11.2008 THE TRADE CREDIT ORS COULD NOT BE ATTENDED AND THE ASSESSEE MAY BE ALLOWED 10 DAYS TIME TO PRODUCE THO SE FARMERS. HOWEVER, THE ASSESSEE VIDE HIS LETTER DATED 08.12.2008 INFORMED THE ASSESSING OFFICER THAT THE ASSESSEES BUSINESS HAS BEEN COMPLETELY SHUT DOWN A ND NO AMOUNT REMAINS PAYABLE TO THE FARMERS FROM THE ASSESSEES SIDE. T HEREFORE, THOSE TRADE CREDITORS ITA NOS.432 & 452/AGR/2010 A.Y. 2001-02 4 WERE NOT UNDER THE CONTROL OF THE ASSESSEE. THEREF ORE, THE ASSESSEE WAS UNABLE TO ENSURE THEIR ATTENDANCE BEFORE THE ASSESSING OFFICE R. UNDER THE CIRCUMSTANCES, BONAFIDE OF THE ASSESSEE IN RESPECT OF PRODUCING CA SH CREDITORS CANNOT BE DOUBTED. WE NOTICED THAT INSPITE OF THE CIRCUMSTANCES POINTE D OUT BY THE ASSESSEE FOR HIS INABILITY TO PRODUCE THE CASH CREDITORS, THE ASSESS ING OFFICER DID NOT MAKE FURTHER ENQUIRY. CONTRARY TO THAT THE ASSESSEE DISCHARGED THE ONUS BY FILING VARIOUS DETAILS INCLUDING CHUKKARA REGISTER WHICH WAS MAINTAINED BY THE ASSESSEE REGULARLY AS A PART OF BOOKS OF ACCOUNTS. THE ASSESSING OFFICER D ID NOT EXAMINE THE MANDI AUTHORITIES THOUGH IT WAS DIRECTED BY THE I.T.A.T. THAT IF REQUIRED THE ASSESSING OFFICER IS AT LIBERTY TO RECORD THE STATEMENT OF MA NDI AUTHORITIES. THUS, ON THE BASIS OF MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAS DISCHARGED THE ONUS AND THERE IS NO CONTRARY MATERIAL ON RECORD, N EITHER THE SAME IS POINTED OUT BY THE LD. DEPARTMENTAL REPRESENTATIVE AT THE TIME OF HEARING BEFORE US. IN THE LIGHT OF THE FACTS, WE ARE OF THE VIEW THAT WHEN THE ASSE SSEE HAS SATISFIED THE REQUIREMENT OF SECTION 68 OF THE INCOME TAX ACT, THE ADDITION C ANNOT BE MADE. WE, THEREFORE, DELETE THE ADDITION OF ` 6,17,149/- WHICH HAS BEEN CONFIRMED BY THE CIT(A). WE ALSO HOLD THAT THE CIT(A) HAS RIGHTLY DELETED THE A DDITION OF ` 12,12,164/- WHICH IS PERTAINING TO THE EARLIER YEAR. ITA NOS.432 & 452/AGR/2010 A.Y. 2001-02 5 6. AS REGARDS THE CONTENTION OF THE REVENUE IN THE GROUND OF APPEAL THAT THE CIT(A) SHOULD DIRECT THE ASSESSING OFFICER TO TREAT THE LIABILITY UNDER SECTION 41(1)(A) OF THE ACT, THIS CONTENTION OF THE REVENUE AT THIS SAGE CANNOT BE ACCEPTED AS NEITHER IT WAS A CASE OF ASSESSING OFFICER NOR S UCH MATERIAL IS AVAILABLE ON RECORD BASIS ON WHICH IT CAN BE SAID THAT SECTION 4 1(1)(A) OF THE INCOME TAX ACT IS APPLICABLE PARTICULARLY UNDER THE CIRCUMSTANCES WHE RE PAYMENTS WERE MADE SUBSEQUENTLY. IN THE LIGHT OF ABOVE DISCUSSION, TH IS CONTENTION OF THE REVENUE RAISED IN THE GROUND OF APPEAL IS REJECTED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 24 TH FEBRUARY, 2012 PBN/* COPY OF THE ORDER FORWARDED TO: APPELLANT/RESPONDENT/CIT CONCERNED/CIT(APPEALS) CO NCERNED/D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY